'House of Cards' tax breaks cost Marylanders, should end: report

WASHINGTON (Reuters) - Tax credits for filming Netflix’s “House of Cards” and HBO’s “Veep” are costing Maryland taxpayers money and should be ended in 2016, state lawmakers concluded in a new report.

Maryland has offered $62.5 million in tax credits to film and television productions through 2016, with $60.2 million of that going to “House of Cards,” the Washington political thriller starring Kevin Spacey and Robin Wright, and “Veep,” the comedy starring Julia Louis-Dreyfus as a U.S. vice president.

Now lawmakers say the cost benefit is fleeting and does not produce long-term economic gains to the state, which is already facing a budget shortfall next year of $600 million.”As soon as a film production ends, all positive economic developments cease too,” according to a draft version of the report first reported by The Washington Post.Maryland lawmakers now recommend “incentives that create permanent and lasting employment, rather than temporary jobs,” said the report, which will be the subject of a public hearing next month.

HBO spokesman Quentin Schaffer said on Monday he has not yet reviewed the report and could not comment on specifics.”It sounds like it may understate the impact we have by only looking at direct impact on tax revenue and not fully capturing the spend on such things as hotel rooms, location fees, food, gas, wardrobe, and construction,” Schaffer said.”HBO has had a long history filming in Maryland,” Schaffer said. “We hope there continues to be an incentive in place that allows us to keep Maryland competitive with other states.”

Susie Arons, a spokeswoman for Media Rights Capital, said its production “House of Cards” has been a “committed partner to the state of Maryland over the course of three years, generating significant economic benefits with a direct spend of nearly $200 million, in exchange for consideration in the form of production incentives.”

The Emmy-winning political drama, an adaptation of a British series, is set in Washington, D.C., but filmed mainly in and around Baltimore.

“Veep,” which has also won several Emmys, is also filmed mainly in Maryland. HBO is owned by Time Warner Inc.

(This version of the story corrects second paragraph to show tax credits offered through 2016)